Shades of 1998 for global markets—or not?

Oil is testing lows, emerging markets are struggling, and a strong dollar is threatening to knock over debt dominoes: Wall Street is seeing shades of 1998.

But the difficulties of that year—which saw the latter parts of the Asia financial crisis, a collapse in Russia, and oil below $11—may not soon be repeated.

Henny Ray Abrams | AFP | Getty Images

A trader (left) and a specialist on the floor of the New York Stock Exchange on a day when the Dow Jones industrial average fell 222 points, in January 1998.

"1998 was primarily a situation where a lot of companies had borrowed in dollars because rates were lower; the dollar went up and reserves became depleted," said Robert Sinche, Amherst Pierpont Securities global strategist. "We don't have a lot of similar characteristics now."

Now, currency reserves are at or near their record levels, Sinche said, and there's unlikely to be a panic for greenbacks to service dollar-denominated debt.

The rising dollar will also not be as painful for emerging markets, since most countries have since floated their currency, instead of keeping a peg to the U.S. dollar, according to trader Brian Kelly of Brian Kelly Capital.

"The most important and obvious difference between then and now is '97 and '98 was mostly basically about fixed exchange rates and a sudden stop in capital flowswhich turned from large inflows (into emerging markets) to large outflows," Binky Chadha, chief global strategist at Deutsche Bank told CNBC.

Now countries have been able to use their currency as a "release valve" for comparative weakness, and so are in a much better position than they were in the '90s, Kelly said.

And so, a big difference between the present situation and the '90s is that emerging markets are already on a downswing after peaking in 2010.

"It's basically coming on the five-year anniversary, so it's massively underperformed already," Chadha said. "You have to keep in mind that most of the crises in the past have come from unhedged currency exposure. If there is a crisis [now] it would be a crisis of exhaustion not because someone has unhedged currency exposure."

Today's global macroeconomic concerns are largely driven by an over-reaction to a shift in commodities, Sinche said, so the fundamental driver of emerging markets' problems is different this time around.

As such, wealth loss from the downturn may be accompanied by gains elsewhere—very different from 17 years ago.

"This is a lot different in that in the '98 situation where there were a lot of losers and really not a lot of winners," Sinche said. "Here you do have a number of countries which are suffering…but on the other side of that you have a lot of countries benefiting from the decline of commodity costs."

Outside of short-term trades, investors want to know if there's a risk of emerging market weakness spreading into other markets—especially given the greater interconnection in today's global finance system.

"I don't yet see the sort of thing that would lead me to think we'll repeat '98," said John Manley, chief equity strategist at Wells Fargo Funds Management. That said, it's hard to know where real weakness is until it's already exposed, he added.

Sinche said there could be some element of financial market contagion—as emerging countries struggle, that could translate into downward pressure elsewhere (if only because of risk aversion and margin calls)—but it remains unclear whether that would translate into weakness in real economies.

Additionally, the collapse in commodities may largely be a function of the strong dollar (which itself rose as the U.S. economy appeared stronger than its developed peers). But as other countries benefit from easing policies and weak currencies, the differences in growth may shrink, said Jim Paulsen, Wells Capital Management chief investment strategist.